Frequently Asked Questions

How is Indiana changing its approach to setting child care assistance reimbursement rates? Reimbursement rate structures have historically been based on market rate surveys. While an important input, market rates do not always reflect the difference between child care costs and a family's ability to afford it. Indiana’s new cost-based approach for setting reimbursement rates helps to provide an understanding of the actual cost of care per child to ensure that providers are reimbursed accordingly. This is done by focusing on cost drivers, which allows providers across auspices, quality levels, geography and the age groups they serve to be compared on an "apples-to-apples" basis. Additionally, the new model accommodates the realities of child care services, including shifting daily schedules, flexible staffing models and classrooms that open, close or are converted to other age groups (e.g., before-/after-school care) depending on the time of day.

How did Indiana determine child care costs for the new reimbursement rate structure? To better understand the actual costs of child care, Indiana embarked on a comprehensive analysis of cost-modeling data beginning in 2021 using Stabilization Grant applications. To date, cost data has been collected by age group, provider type and quality level for 3,100+ providers and 8,984 classrooms across early childhood and school-age programs. The state reviewed a comprehensive set of cost factors, including class sizes, hourly wages and benefits, facility size and cost per square foot, child assessments and more.

What will the new reimbursement rates be for providers? New rates offer a minimum 20% increase across all payments and additional increases for specific providers and care types where cost data showed inequities. Notable increases, for example, can be seen for Infants and Toddlers in Licensed Centers and Registered Ministries. Please refer to the Provider Reimbursement Rates webpage for more details.

I am a provider whose market rate is increasing. Will I need to charge private pay families more to match the new reimbursement rate?

The new rates reflect the cost of providing child care across specific settings, geographies, seat types and quality levels. While providers are not required to align their rates with the new reimbursement rates, they may choose to do so. This is a business decision to be made by providers. You will still receive the new reimbursement rate regardless of what you charge to families.

Can I charge separate rates for private pay and CCDF families? Regardless of what rate a provider decides to charge, that rate should be consistent across payer types. Providers may issue scholarships or use a sliding fee scale if they wish but should be charging private pay and CCDF families the same base rate for care.

Do I need to submit a provider change form to receive these new rates? No. Please note that you may choose to change your rate at any time, but voucher rates will remain the same throughout the entire voucher period until redetermination.

Will On My Way Pre-K providers continue to receive a 10% increase on top of reimbursement rates?

No. Additional expenses for OMWPK programs were calculated in the new cost-based model and are reflected in the new rates. Based on this new model, On My Way Pre-K providers will no longer receive the additional 10% increase on top of reimbursement rates. OECOSL will be discussing these changes with OMWPK programs during fall kick-off meetings. Scheduling details for these meetings are forthcoming.

Will On My Way Pre-K providers continue to receive a 10% increase on top of reimbursement rates? No. Based on this new cost-based model, On My Way Pre-K providers will no longer receive the additional 10% increase on top of reimbursement rates.

What supports will be available to providers to better understand and share costs with the state? Technical assistance will be available to child care providers through SPARK Learning Lab’s business supports.

How long will the new reimbursement rates remain in effect? The new reimbursement rates will go into effect on July 30, 2023. Providers should expect to see the new structure applied to payments received on August 30, 2023. These rates will continue through fall 2024, when the state must reassess and introduce a permanent structure.

How can I share my feedback about the new reimbursement rates and inform future costs and rate structures? A public comment period was hosted for providers and community members to share questions and feedback. The state will continue seeking providers' feedback to evolve the model during this one-year transitional period.